‘Spend your budget or lose your job’

By Angela Lorraine...

January 30, 2017

THE DUTERTE administration is eyeing P1.2 trillion for infrastructure in 2018, equivalent to 6.8 percent of the country’s gross domestic product (GDP). This spending estimate is 34.57 percent higher than the approved P891 billion budget allocated for infrastructure in 2017 which comprises 5.2 percent of the country’s total GDP.

In the previous years, however, particularly during the Aquino administration, generating funds was hardly one of the bottlenecks to infrastructure buildup. Rather, the weak absorptive capacity of implementing agencies was one of the biggest challenges faced by previous governments.

Thus, despite the availability of funds, the Aquino administration consistently underspent during its six-year term.

The Department of Budget and Management (DBM), now under budget secretary Benjamin Diokno, is hopeful that the Duterte administration will be able to skirt a similar fate.

Significant changes will be seen in the way public funds are disbursed, Diokno earlier said, as the government aims to increase investments in infrastructure and avoid strongly underspending.

His worst fear, according to Diokno, are scenarios wherein the government, under the Duterte administration, will for some reason also fail to spend funds that are essential to sustainable development especially considering the bright prospects for growth.

“I think the Duterte administration should not be held accountable for the low absorptive capacity of the previous one,” Diokno said in a text message to Malaya Business Insight.

“The President is serious in exacting performance from his men: ‘spend your budget or lose your job,’”he added.

Diokno said that the DBM intends to monitor the status of projects as closely and religiously as it possibly can even turning to technology to do this.

“Major projects will be geotagged. We will employ drones to monitor projects,” Diokno said.

“Some projects in Manila, Cebu, and Davao will be done non-stop, 24/7,” he added.

Earlier, Carlos Dominguez III, finance secretary, said that while the Duterte administration is pursuing Public-Private Partnerships (PPPs) as part of its massive infrastructure plan, the Department of Public Works and Highways (DPWH) itself will undertake certain big-ticket projects like road improvements which it can approve faster and build cheaper than private contractors.

Dominguez said the government also plans to break up certain major projects into smaller ones to fast-track their completion.

“For instance, rather than having one contractor for, let’s say 30 kilometers of road, we can break that up to five contracts of some kilometers each,” Dominguez said.

“We will avoid PPP where we can do it ourselves. A PPP typically takes 13 months to get it going, with the bidding and the negotiations for the contracts. So the projects that we can do ourselves, like the two road-widening projects in Bulacan and north of Manila, totaling about probably 40 kilometers (that), will be done directly by the DPWH” he said.

For better project monitoring, Dominguez said he has discussed with officials of the DPWH and the National Economic and Development Authority (NEDA) the possibility of using drones to check on whether construction works are being implemented on schedule and whether specifications are being met for particular projects.

As another measure, the government, in step with the Freedom of Information (FOI) order of President Duterte, is also putting up websites for these projects so the public could be better informed about their details and find out directly the progress of these undertakings.

“So this will be open to the public and available to anyone who’s interested, both, as I said, drone pictures, drone images, as well as financial contract information. So this is going to be done in that fashion,” Dominguez said.

According to the finance chief, the Duterte administration needs at least P8 trillion to close the infrastructure gap over the next six years.

Dominguez said the government is financing its infrastructure program through a mixture of soft loans, grants, official development assistance (ODA) and the PPP.

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